{"id":536227,"date":"2026-01-16T10:21:41","date_gmt":"2026-01-16T10:21:41","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=536227"},"modified":"2026-02-17T12:57:41","modified_gmt":"2026-02-17T12:57:41","slug":"new-merit-venture-rises-from-ashes-of-collapsed-firm","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/tech\/new-merit-venture-rises-from-ashes-of-collapsed-firm-16-01-2026\/","title":{"rendered":"New Merit venture rises from ashes of collapsed firm"},"content":{"rendered":"<p>Investors and former directors of failed contractor Merit Group Services have launched a new modular construction business.<\/p>\n<p>Merit Industrialised Construction has been formed following an asset purchase completed through the administration process, which began when the Northumberland-based <a href=\"https:\/\/www.constructionnews.co.uk\/tech\/modular-builder-merit-enters-administration-19-11-2025\/\">Merit Group and Merit Holdings collapsed<\/a> in November 2025.<\/p>\n<p>The new business is backed by Modulex Modular Buildings, a global modular construction group supported by London-based Red Ribbon Asset Management, and HBEM, a US-based firm specialising in high-tech manufacturing environments.<\/p>\n<p>Several former directors of Merit Group Services have also joined the company.<\/p>\n<p>According to its backers, the relaunched Merit will operate under \u201ca new corporate structure, governance framework and operating model,\u201d and will make use of design systems, manufacturing know-how and intellectual property acquired from the administrators.<\/p>\n<p>The firm will target work in life sciences, data centres, semiconductors, healthcare and battery technology, both in the UK and internationally.<\/p>\n<p>Tony Wells, chief executive of the new company and previously Merit Group\u2019s boss, said: \u201cMerit represents a new chapter.<\/p>\n<p>&#8220;The business has been established with new investment partners, new governance and a refreshed operating model. This structure allows us to build on proven intellectual property while developing new capabilities for the future.\u201d<\/p>\n<p>He added: \u201cThe administration of the former businesses was a difficult outcome and resulted in the loss of a significant manufacturing presence in the region.<\/p>\n<p>&#8220;Merit has been created to move forward positively, supported by strategic investment and international opportunity, with a focus on design, manufacturing and delivery excellence.\u201d<\/p>\n<p>Suchit Punnose, founder of Red Ribbon, said the collaboration had been under discussion for some time.<\/p>\n<p>\u201cThe Merit platform provides Modulex with the IP to grow into new markets nationally,&#8221; he said. &#8220;We are also aligned that the Merit IP will support new international markets including India and the US.\u201d<\/p>\n<p>Red Ribbon is currently funding the construction of a 40-acre manufacturing plant in Mumbai for Modulex, which will produce fully fitted steel modular buildings, bathroom pods and doors and windows.<\/p>\n<p>The factory will support commercial and residential schemes in India and selected international markets.<\/p>\n<p>Joining the board of the new company is James Withey, group managing director of Modulex and a former managing director of Algeco.<\/p>\n<p>He said: \u201cMerit over the last 10 years has invested significantly in the development of manufactured construction products and delivery systems. Modulex will benefit significantly from the Merit IP and build processes.\u201d<\/p>\n<p>The company\u2019s co-investor, HBEM, is led by Brad Antin, who also owns construction recruiter the Caddy Group. He said the new business would allow continued development of products and systems built up by Merit over the past decade.<\/p>\n<p>\u201cThis partnership brings together capital, intellectual property and international capability,\u201d Antin said.<\/p>\n<p>&#8220;It is positive that the research, development and innovation embedded within the acquired IP can now be progressed and made available to clients in the UK and overseas through a newly formed organisation.&#8221;<\/p>\n<p>The announcement comes just weeks after <a href=\"https:\/\/www.constructionnews.co.uk\/financial\/administrations\/modular-firm-merits-supply-chain-unlikely-to-recover-17-4m-08-01-2026\/\">administrators at Interpath warned<\/a> that unsecured creditors of the former Merit Group companies were unlikely to recover the \u00a317.4m they are owed. In total, the company collapsed with debts of \u00a331m. Secured creditor Santander is owed \u00a313m.<\/p>\n<p>Unaudited accounts filed for the year to 30 June 2025 showed a \u00a34.2m pre-tax profit on turnover of \u00a379.7m.<\/p>\n<p>However, the company ran into serious cash-flow issues after suffering delays and disputes on large jobs.<\/p>\n<p>A winding-up petition from HMRC stalled new contract awards and led directors to seek a solvent sale before entering administration.<\/p>\n<p>A statement of proposals published by administrators in January confirmed that Interpath had sold a package of assets to the new company for \u00a3396,000 on 19 December.<\/p>\n<p>Merit Industrialised Construction will also assist the administrators in pursuing legal claims and recovering \u00a33.2m in unpaid debt from the original company\u2019s clients.<\/p>\n<p>All 284 Merit staff were made redundant when the business failed. The administrators estimate that each former employee will receive just \u00a3800.<\/p>\n<p>In 2023, the former company had been appointed to build a \u00a333m hospital in Berwick, and was named to a four-year NHS framework covering modular projects between \u00a35m and \u00a325m.<\/p>\n<p><em>Source: <a href=\"https:\/\/www.merit.co.uk\/who-we-are\">Merit statement<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Investors and former directors of failed contractor Merit Group Services have launched a new modular construction business. Merit Industrialised Construction has been formed following an asset purchase completed through the administration process, which began when the Northumberland-based Merit Group and Merit Holdings collapsed in November 2025. The new business is backed by Modulex Modular Buildings, &#8230;<\/p>\n","protected":false},"author":129711,"featured_media":460124,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[552,579],"tags":[],"class_list":["post-536227","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial","category-tech"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.7 (Yoast SEO v26.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>New Merit venture rises from ashes of collapsed firm | Construction News<\/title>\n<meta name=\"description\" content=\"Investors and former directors of failed contractor Merit Group Services have launched a new modular construction business. 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